"Weight Loss Miracle Drug" Cross-Border Dream Shattered! Oral Ozempic Treatment for Alzheimer's Disease Declared a Failure, Novo Nordisk Plummets 12%

Novo Nordisk's Alzheimer's drug trial fails, stock price plummets to the lowest level since 2021.

On Monday local time, Novo Nordisk announced that the oral version of its Ozempic failed to slow the progression of Alzheimer's disease in two large clinical trials, marking a failed attempt viewed as a long-term investment. Based on cognitive assessment results, patients taking the drug did not show significant improvement.

Following the announcement, Novo Nordisk's stock price plummeted by as much as 12.4% in Copenhagen trading, reaching its lowest level since July 2021. The company has decided to terminate the planned one-year study extension. So far this year, the stock has fallen by more than half, raising concerns among investors about Novo Nordisk's long-term competitiveness in the booming obesity treatment market.

Competitor Eli Lilly's stock also fell in pre-market trading in the U.S., while Biogen, which focuses on Alzheimer's drug development, saw its stock rise by 6.7%. Morgan Stanley analysts previously estimated that if the trial had been successful, the drug could have brought Novo Nordisk up to $5 billion in annual revenue growth.

High-risk trial declared a failure

Alzheimer's disease is characterized by severe cognitive decline, memory loss, and personality changes, and is recognized as a challenge in drug development. Novo Nordisk had previously described these trials as high-risk projects.

Novo Nordisk's Chief Scientific Officer Martin Holst Lange stated in a statement: "We believe it is our responsibility to explore the potential of semaglutide." Semaglutide is the generic name for Ozempic. Although the treatment showed some improvement in certain physiological indicators related to Alzheimer's disease, it did not translate into a significant slowdown in disease progression.

According to Morgan Stanley analysts, the probability of success for this trial was estimated at about 25%, with a failure probability as high as 75%. The company indicated to analysts in September that it expected the Alzheimer's research to detect only low double-digit percentage differences in cognitive decline progression at most.

This trial result is a setback for Novo Nordisk's efforts to regain leadership in the obesity treatment market. If Wegovy had been effective against the most common form of dementia, it could have provided the company with an advantage in competing with U.S. rival Eli Lilly's Zepbound.

The two trials tracked the condition of over 3,500 patients with mild Alzheimer's disease. Nordnet AB investment economist Per Hansen stated: "It's like a lottery ticket that could have had immense value. Investors had not assigned any real value to it before, but hope still exists."

Novo Nordisk's stock price has fallen 73% from its peak in 2024, reflecting growing investor concerns about the company's long-term competitive position in the obesity treatment market it helped create